THIRUVANANTHAPURAM: Kerala's decision to emulate Tamil Nadu in ending the practice of private operators registering their buses in other states threatens to stall the daily inter-state services besides opening legal challenges for a possible violation of central law.
Around 100 private buses operate inter-state services including in the busy Ernakulam-Bengaluru route. But barring only a few, all are registered in states with lower tax rates. While this is permitted under the All India Tourist Vehicles (Authorization or Permit) Rule 2021, the state transport commissioner issued an order on October 26 that these vehicles have to pay tax in Kerala or shift the registration to the state to allow them to operate service from November 1. The bus operators are planning to halt operations and challenge the order in the court.
Kerala took the decision after TN started imposing tax on vehicles not registered in that state. Karnataka also started demanding operators to shift the registration to the home state. If all three states start demanding separate taxes, a bus operating, say in the Ernakulam-Bengaluru route, will have to pay additional money.
“The states get a share of money paid for All India Tourist Permit (AITP) under the central law. If they still resort to collecting separate taxes, it amounts to double taxation. It is against the law made by parliament,” said Bus and Car Operators Confederation of India (BOCI) state chairman Riyas A J. He said the operators have not done anything illegal by opting to register vehicles in states with low tax.
“We’re only taking advantage of the One Nation, One Permit Scheme made by Parliament. Before the rule came into effect, only four buses were registered in Kerala. The state now gets a share of close to Rs 1 crore a month under the AITP,” he added. The BOCI has challenged the TN government while a High Court division bench will consider the case on November 8.
It has also approached the Supreme Court as more states demand separate taxes. The bus operators said parliament passed the law in 2021 to avoid multiple taxation and ensure smooth movement of inter-state passenger services similar to that of goods services.
The transport department points to revenue loss if operators shift to other states for registration. It also found TN’s decision a precedent to change the rule that came into force in April 2021. However, the enforcement authorities lack clarity.
“As per the central law, the bus operators do not have to pay separate tax to any state. The state gets a share of the total tax paid by the operators under AITP,” said an officer. He said implementation of the new rule would reduce the number of services to Kerala.